Optical Ethernet is a cost-effective technology that combines the simplicity and widespread use of Ethernet for both telephony and computing with the increased bandwidth and reliability of fiber optics. This allows service providers to deliver high-bandwidth services in real time by reducing delays often associated with downloading data.

UTS initially plans to deliver broadband Internet access through digital subscriber lines (DSL), virtual private networking (VPN) and other Ethernet data services using Nortel Networks Passport 8600 Ethernet Switches. The new network will ultimately position UTS to offer video services like online gaming, video calling, and 'pay-per-view' broadcast programming.

"UTS is continually striving to bring better and more advanced services to our customers," said Julio Constansia, managing director, United Telecommunication Services of Curacao. "Nortel Networks Optical Ethernet solution will allow us to improve our current service offerings and roll out new ones, facilitating high-speed access to Internet and other sophisticated data services to residents, businesses, educational institutions and government agencies."

"Nortel Networks Passport 8600 solution will help position UTS to improve network performance with a scaleable infrastructure that can stay ahead of the demand for advanced telecommunication services in Curacao," said Ray Bulengo, Caribbean sales director, Nortel Networks. "Leveraging our market leadership in Optical Ethernet and our vast regional experience, Nortel Networks will work closely with UTS to help them achieve their business goals."

Nortel Networks will begin immediately to implement Passport 8600 Ethernet Switches as an Ethernet backbone for the UTS wireline network in Curacao. The project is expected to be completed by the third quarter of 2004.

Nortel Networks Passport 8600 Series Ethernet Switches are a key part of Nortel Networks Optical Ethernet portfolio, which is designed to help service providers transform and simplify their networks by converging voice, video and data on a single, secure and scaleable infrastructure. This positions service providers to drive reduced costs and new, revenue-generating opportunities.

Nortel Networks has had a presence in the Caribbean since the late 1960s, working with leading regional service providers and corporations to deploy advanced communication infrastructures to serve residents, businesses and visitors.

UTS was established as a response to rapid development and convergence of IT and media technologies. Moving towards customer specific services and quality enhancement, the United Telecommunication Services is one of the Caribbean's growing providers of telecommunication services, serving consumers, businesses and governments. Backed with over 90 years of experience, UTS is the trendsetter paving the way to advanced communication solutions that customers can rely on. A leading supplier in the telecommunication service, the United Telecommunication Services is the leader in long distance and Internet services as well as transaction-based services such as collect calling, lease lines and pre-paid cards on Curacao. UTS defines its mission statement as the preferred supplier of full range of customized telecom and telecom-related services with quality, reliability, prices and delivery time tailored to the needs of its customers.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com or www.nortelnetworks.com/media_center.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events.

Factors which could cause results or events to differ from current expectations include, among other things: the outcome of Nortel Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel Networks customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel Networks purchase contracts; the impact of Nortel Networks supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.

For additional information with respect to certain of these and other factors, see the most recent Form 10 Q/A and Form 10-K/A filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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